Tuesday, October 16, 2007

after digging through some ofthe electronic filings made accessible thus far, out of the federal districtcourt, and the 10th circuit, in denver,i need to revise some of my snark aboutthe vitality of joseph nacchio's pro-offered defense. but to do so, i'llhave to offer a quick detour into in-sider trading and securities law.

please bear with me -- i think you will find it all to be worthwhile.

as c.e.o. of qwest, joe nacchio madestatements about his confidence in thevarious wall street, and internally-gen-erated (qwest) projections for revenue,cash-flow, and e.p.s. for the year 2001.

under then-generally-accepted principlesof federal securities law, he would be liable for his statements -- as a matter of securities fraud -- only if he did not have a reasonable basis to believe them,when he made them. his defense, it seems,was not just that the government attackedhim for refusing their unconstitutional snooping advances.

no, he also alleged that,from at least february 2001 onward (and,that date is significant), many supposedlyclassified government documents would provethat he, on behalf of qwest, was engaged in"very- high-level", substantive, and deeply-detailed negotiations/discussions with u.s.clandestine agencies for significant newcontract work -- new revenue.

these negotiations -- secreted even fromhis board of directors -- were the basis ofhis "reasonable belief" that qwest would meetwall-street projections for the year 2001.

but he was largely prevented from establishingthis defense at trial, because the governmentdid not turn over the proof -- so-called bradymaterial, in enough detail, or quantity, tomake this defense viable before the jury.

you see -- under then-applicable securitieslaw, nacchio would not be liable for hisstatements (even when they did not pan out),and therefor, not liable for trading on the basisof undisclosed negative information, if -- atthe time he made the statement -- he hadreasonable grounds to believe the projectionwould turn out to be correct. even if it didn't.

got that? [end, s.e.c. primer.]

okay -- so then, he refuses to let the govern-ment have warrantless access to qwest data, inmid-2001, presumably relying on qwest legal adviceto the effect that qwest could be held liablefor violating the constitutional rights of qwestcustomers -- by letting the government throughits gates, without a regular warrant.

next -- the government effectively "black-balls"qwest -- on much of the existing clandestine work,switches, boxes, etc. -- and qwest then, predictably,cannot meet its projections for 2001 and 2002.

it is beyond the scope of this blog to sort outwhether the government contracts were large enoughto actually "move qwest's needle" backwardin the manner alleged by joseph nacchio -- and ido remember that he was, and is, facing prison. . .[and i also notice that his trading continued,even after this time -- and outside the levelsearlier established by his 10b-5(1) trading plan.

so, he is no saint -- where's the news in that, though?]

but the the above, and below, excerpts [click eachto read them!], from the newly-unsealed pre-trialbriefs in his case are tantilizing.

they provide very strongly corroboration thatthe so-called "groundbreaker" or some other, un-named, project was well-underway a full sevenmonths BEFORE the world trade center attacks.

and, because many of these documents were deemed"brady" materials by the judge -- they are"exculatory" of the charges leveled against nacchio -- theywould suggest that the documents admit things about the government it would not want its people to know.

for example, they might establish that the programs for which mr. nacchio was negotiatingplainly violated the watergate-era reforms codified into FISA. it seems clear that -- at a minimum -- the documents strongly support the contentions of both mr. nacchio, and his lawyers,that the projects envisioned warrantless surveillanceof u.s. citizens, in violation of their fourth amendmentrights. . .

all content: (cc) 2007-08

the buddha said

IN LIGHT OF THE CLEAR EVIDENCE OF “A HIGHER INVOLVEMENT” IN I. LEWIS SCOOTER LIBBY’S PERJURY AND OBSTRUCTION OF JUSTICE -- AND THEN THE JULY 2, 2007 PRISON SENTENCE AND IMMEDIATE, BREATH-TAKING JULY 2, 2007 PRESIDENTIAL COMMUTATION OF THAT SENTENCE -- IT IS HIGH TIME TO EXAMINE THE MERITS OF INDICTING THE VICE PRESIDENT, DICK CHENEY, AS THE LEADER OF A CONSPIRACY TO MISUSE CLASSIFIED INFORMATION, AND COMPROMISE C.I.A. OPERATIVES — ALL FOR PARTISAN POLITICAL RETRIBUTION.